Justice Dept. to Google Books: Close, But No Cigar

Google’s plan to digitize the world’s books into a combination research library and bookstore has hit another snag, in the form of a U.S. Justice Department statement that “despite substantial progress made, issues remain” with the proposed settlement agreement of the class action lawsuit The Authors Guild Inc. et al. v. Google Inc.

The Justice Department joins key members of The Authors Guild in applauding some of the changes Google and the guild have made to their proposed agreement, submitted in September, including the elimination of Google’s right to the books for unspecified future uses, the creation of a new position to represent unknown rights holders, and a mechanism allowing competing companies to license Google’s library to offer competing products.

But none of these changes address the Justice Department’s main procedural problem with the case: That it is a class action lawsuit whose aim is not to settle a past situation, but “to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation.”

In addition, the DOJ still feels that Google may have violated copyright law by scanning all of these books without permission, despite its pledge to pay $125 million to copyright holders who agreed not to opt out of the plan after scanning was well underway, as well as a percentage of sales revenue going forward.

However, the Justice Department says it still believes that Google Books will provide a societal benefit, and it is right. Without some sort of large-scale attempt to digitize pre-internet information, the history of knowledge will be forever bifurcated by an inflection point at some point in the ’90s. The rule of thumb is simple: If something isn’t digitized, it will be much harder, if not impossible, to find. We desperately need some sort of Noah’s Ark to port our analog past into our digital future, and Google is willing to fund a large portion of that project.

But the Justice Department’s statement indicates that even with a new provision forcing Google to license the its digital library to competing services, the agreement would grant Google a practical monopoly of the market for massive catalogs of digital books — echoing a complaint from Amazon, which obviously also has designs on selling books digitally.

“The amended settlement agreement still confers significant and possibly anti-competitive advantages on Google as a single entity,” reads the DOJ statement, “thereby enabling the company to be the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats.”

In other words, even if Google agrees to license a massive digital book repository to anyone who wants it at a fair price, it would still have unfair advantages over any other entity in providing the books, and would likely dominate whatever market emerges for selling or embedding advertisements alongside digital books.

The Justice Department says it should be possible for Google to move forward so long as its agreement with authors is properly structured. The department pledges to help Google, authors, publishers and “other stakeholders” arrive at a solution that would give copyright holders the power to authorize Google and others to sell their works digitally, rather than forcing them to opt out if they don’t like Google’s plan (the deadline for which has already passed). It says this solution can be provided by either the market or legislation, which puts additional pressure on Google to work this out in the private sector without involving Congress.

Next stop: U.S. District Court for the Southern District of New York, for a Feb. 18 hearing on the proposed settlement agreement, where Google will get another chance to make the case that if it is put in charge of the world’s information, it will do no evil.